Saturday, June 3, 2023

NCLT Mumbai permits Jalan-Kalrock Consortium to take over Jet Airways

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The Mumbai Bench of the National Company Law Tribunal (NCLT) has allowed the consortium of Murari Lal Jalan and Florian Fritsch for the successful resolution plan applicant, of taking over the Jet Airways India. 

The Bench of judicial member Justice P.N. Deshmukh and technical member Shyam Babu Gautam gave assent to the Jalan-Kalrock Consortium (JKC) for infusing funds into Jet Airways, by taking over its control and management, and execute all necessary documents to implement the approved resolution plan.

The Tribunal granted an additional six months to the consortium for making payment to lenders including the creditors and employees.

The bench said that this was in interest of justice and for achieving the primary objective of maximization of assets and resolution of Jet Airways. 

The consortium of bankers had opposed this as they sought a stay on the order for two weeks. However, the Tribunal refused to grant the stay.

Jet Airways owed over ₹8,000 crore to lenders, which also includes the consortium of banks.

The airline had a large debt by way of accumulated losses to the tune of ₹13,000 crore, vendor dues of over ₹10,000 crore and salary dues of over ₹3,000 crore.

The NCLT Mumbai in 2019 initiated the Corporate Insolvency Resolution Process (CIRP) in which the Insolvency and Bankruptcy Code on an application by a consortium of lenders led by the State Bank of India. 

Ashish Chhawchharia was appointed as the resolution professional to monitor the process. 

The bid for the airline company was successfully done by the Jalan-Kalrock consortium.

The consortium includes Jalan, who had shares in his personal capacity, and Fritsch, who held shares through his investment holding company Kalrock Capital Partners.

Bank guarantees worth ₹150 crore was deposited by JKC in compliance with the approved resolution plan which had been made effective from May 20, 2022. 

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